Sewer increases expected annually

The City of Portsmouth has informed the public of an increase in sewer rates just in time for the release of an audit that found several noncompliance issues. This is the second sewer rate increase in two years.

“The Auditor of the State placed the City in Fiscal Watch on November 20, 2012. The City still retains the designation,” a letter dated July 4 addressed to Portsmouth Utility Customers states. “At the end of 2016 the City had every fund in the black except for the Wastewater fund. The last time the City’s finances were not in deficit was 2007. In the Wastewater Fund the City has deficit spent 10 of the past 12 years. The Wastewater Fund ended 2016 with a balance of -$1,514,609.40. For month ending April 2017 the fund was at -$1,643,635.22.”

The letter further cites efforts to address noncompliance issues with U.S. Environmental Protection Agency as contributing to the deficit.

“In October 2013 the City of Portsmouth entered into a consent agreement with the United States EPA to make millions of dollars worth of maintenance and capital improvements to the aging sewer system,” the letter states. “In addition we have had unanticipated sewer collapses during the past year. As a result the deficit condition has worsened over the past three years.”

The City was in long standing noncompliance with EPA regulations regarding the combined sewer system and had disregarded years of orders to correct the problem before the consent agreement was established. Due to the decay of the sewer system, the City had repeated complaints of sewage flooding into the resident basements, especially during rainy times. The issue eventually resulted in a lawsuit between a group of residents and the City.

“The wastewater rates were last raised effective April 1, 2016 payable in May 2016,” the letter to utility customers adds. “Unfortunately, they were insufficient to meet the financial needs of the City.”

An Independent Auditor’s Report for the year ending Dec. 31, 2016, prepared by BHM CPA Group and reviewed by State Auditor Dave Yost’s Office states that increases may continue for several years.

The audit found several noncompliance issues.

“Ohio Rev. Code 5705.10(I) states that money paid into the a fund must be used only for the purposes for which such fund has been established,” the audit explains. “As a result, a negative fund cash balance indicates that money from one fund was used to cover the expenses of another fund.”

The audit found a negative cash fund balance for the Sewage System Revenue Fund of $1,421,818.

In response, the City explained that it submitted a revised Financial Recovery Plan in June 2017 aimed at eliminating deficit issues. The City added that the current sewer rate increase is expected to generate an additional $600,000 in revenue.

“Pursuant to the revised Financial Recovery Plan, the City of Portsmouth will continue to raise rates on an annual basis until the deficit is eliminated and there is sufficient reserve built,” the City’s response stated.

The City further stated that the deficit problem is expected to be corrected by the end of 2019.

The audit (accessible at https://ohioauditor.gov/auditsearch/Reports/2017/City_of_Portsmouth_16-Scioto.pdf) found several other issues of noncompliance on matters unrelated to the sewer deficit.

Included in the audit was also finding that the City had more than $600,000 in past due utility accounts, the majority of which are over 120 days old.

The sewer rate increase will appear on September bills. The rate increase is based on usage (decreasing in cost for increased usage) and will affect Portsmouth and New Boston residents.

For Portsmouth residents, the current monthly charges are:

$11 for the base fee and first 1,000 gallons

$5 for 2,000 gallons usage

$5 for every 1,000 gallons above 3,000

$5.13 for every 1,000 gallons above 13,000

$5.54 for every 1,000 gallons after 33,000 gallons

Under the new rate, Portsmouth residents will pay:

$15 for the base fee and first 1,000 gallons (an increase of $4 for residents only using 1,000 of water a month)

$6.80 for 2,000 gallons usage (an increase of $1.80)

$6.50 for every 1,000 gallons above 3,000 (an increase of $1.50)

$6.75 for every 1,000 gallons above 13,000 (an increase of $1.62)

$7 for every 1,000 gallons after 33,000 gallons (an increase of $1.46)

For New Boston residents, the current monthly charges are:

$7.01 for the base fee and first 1,000 gallons

$6.28 for 2,000 gallons usage

$5 for every 1,000 gallons above 3,000

$5.13 for every 1,000 gallons above 13,000

$5.54 for every 1,000 gallons after 33,000 gallons

Under the new rate, New Boston residents will pay:

$10.01 for the base fee and first 1,000 gallons

$7.35 for 2,000 gallons usage

$6.50 for every 1,000 gallons above 3,000

$6.75 for every 1,000 gallons above 13,000

$7 for every 1,000 gallons after 33,000 gallons

The Village of New Boston entered into a 30 year contract with the City of Portsmouth in 1991 for Portsmouth to treat all of New Boston’s sewage and for all of New Boston’s sewage to be transported to the Portsmouth treatment plant. Thus, New Boston utility users are included in the rate increase.

Portsmouth City Council will meet next at 6 p.m. Monday in Council Chambers on the second floor of the Municipal Courthouse on Second Street in Portsmouth.

New Boston Village Council will meet again at 6:30 p.m. Tuesday at the New Boston Community Center on Rhodes Ave. in New Boston.